“Audited accounts are not free from errors” describe it.

Auditing and Assurance Revision Questions and Answers

Answer
Audit is conducted on test check basis which is not a complete set of testing the whole transactions. Auditor plans audit program in such a way that the internal control system with respect to the transaction is effective and there exists least chance for irregularities. This lead applying test check or sampling technique in the audit.

Once, the auditor conduct audit based on audit program, auditor satisfy himself that except the matters stated in the audit report, all other transactions give a true and fair view of the organization.
It may be noted that auditor is not the appropriate authority to certify that financial statements are true and correct. Auditor can express own opinion on overall status of the financial statements but cannot certify the correctness of the statements.
In this scenario, misrepresentation or omission of transactions may lead to the error in the accounts which the auditor might not have detected during the course of audit. Even after careful planning and execution of audit some errors or fraud may remain undetected due to inherent limitations of auditing and control system implemented the management. It is the duty of the management to establish control system that prevents and detects errors and fraud. Thus, the audited accounts may not be free from errors.



(Visited 13 times, 1 visits today)
Share this on:

Leave a Reply

Your email address will not be published.